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The appalling attack on the Sri Lankan cricket team which killed six Pakistani policemen this week has sent shockwaves around the world. As the team's bus reached a roundabout, one group of gunmen created a diversion by firing a rocket-propelled grenade in one direction, and another shot at the bus repeatedly.

The team's assistant coach, Paul Farbrace, said afterward that the team was probably only alive because of the heroism of the bus driver, who kept on driving in the face of the gunshots, bloodied wounds and smashed glass around him.

Certain characteristics of the attack point toward the Punjabi terrorist group Lashkar-e-Taiba, whom most independent analysts think carried out the attacks in Mumbai last year. As in Mumbai, the gunmen worked in pairs and carried walkie-talkies and backpacks stuffed with water, dried fruit and other high-energy food, perhaps anticipating a protracted standoff after taking the cricket team hostage.

So, what is preventing the Pakistani security services from taking decisive action against the group?

Part of the reason is that most of the Pakistani elite are in denial. Too many authoritative figures simply refuse to face the extent to which the terrorist threat from Islamist radicals comes from within Pakistan.

Sardar Nabil Ahmed Gabol, the Pakistani minister of state for shipping, has blamed India for the attack. Hamid Gul, the retired general and former chief of the Pakistani security services, has said, "It's all too obvious that it is the handiwork of the Indian intelligence."

In Pakistan, these sentiments filter down to the streets and are widely believed.

Last year, I met a prominent member of the Pakistan National Assembly who was educated in the West. He told me that he sincerely believed that the 7/7 attacks in London in 2005 and the Sept. 11, 2001 attacks in the United States were both the work of Western intelligence agencies.

When I put it to him that Mohammed Siddique Khan, the leader of the 7/7 bombers, had made a video claiming responsibility, he just looked at me with a face of deep sympathy. To him, I was a young guy who was just naive.

Like much of the Muslim world, Pakistan is rife with conspiracy theories.

Pakistan People's Party leader Babar Awan was quoted as saying that former Prime Minister Benazir Bhutto was killed with a laser gun.

Many Pakistanis believe that America wants the destruction of Pakistan because it is the only Muslim country with nuclear weapons, and that it is trying to enlist Pakistani help in Afghanistan only in order to trap it in a pincer movement between India and American troops there.

Even Gul believes that 9/11 was an inside job.

Why is Pakistan in such deep denial? Perhaps it is because the truth of the extent of homegrown radicalization is too painful and difficult for them to face. Like parents being told that their child is a drug dealer, it is easiest to find all sorts of excuses not to believe it.

There is also perhaps a misplaced sense of privilege to be one of the few people who can see 'the truth' behind all the smoke and mirrors. After all, being in possession of exclusive knowledge makes you part of an elite cohort that knows more than the man in the street.

Perhaps sometimes it helps cloud the elite's nagging fear that in fact they do not know much more than the man in the street.

I think that deep down, most of the educated elite realize that they cannot go on blaming everything on India; but judging by the reaction to the attack this week, they are not likely to admit it soon.

In the meantime though, Pakistan's denial is a bigger problem than analysts usually acknowledge. After all, the first step to tackling any problem is accepting that there is a problem at all. Until Pakistan is able to acknowledge the scale and origin of the terrorism it faces, it cannot begin to tackle it.

Azeem Ibrahim is a Research Fellow at the International Security Program, Kennedy School of Government at Harvard University and a Member of the Dean's International Council, Harris School of Public Policy and Diplomacy at the University of Chicago.

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